NC State Economist Dr. Mike Walden – Is Pay Keeping up with Prices?
Most of us are concerned about two aspects of working, whether we have a job and what does it pay. As the number of jobs in the economy continues to rise, more people are concerned about what those jobs pay. So what is happening to average wages and salaries? N.C. State University economist Mike Walden responds.
“Well, over the last eight years or so as you can imagine — as we’ve gone from growth to a severe recession and back to growth — we’ve seen those numbers bounce around. For example, before the recession, take home pay for the average worker — after you take out inflation — was rising about 1.2 percent annually. Include the value of benefits received by workers, and they’re up about 1.5 percent annually.
Now during the recession as you might expect, that take home pay and benefits went way down. In fact take home pay barely moved. It went up about 1.1 percent annually. If you factor in benefits, .9 percent annually. Now with the rebound in the economy, with the job market improving, with more businesses hiring people, we had a little bit of a rebound in take home pay.
It’s now moving up at .6 percent annually, better than during the recession but still not as good as pre-recession. And if you include benefits, it’s up about .7 percent annually. Now, one of the big differences has been that the growth of benefits — and by benefits, I primarily mean benefits for things like health insurance — has dramatically slowed — started to slow down during the recession — and it’s continued to slow down.
In fact, the annual increase in benefit growth has gone down 75 percent. So, we are seeing people get a little more ahead of the game in terms of their pay, but still nothing dramatic.”